Fearful of the future

The more unpredictable the future becomes, the more determined our efforts to predict it. Probing the future provides full time employment for battalions of academics around the world. Running away from it is usually thought to be the first choice for politicians anxious to secure and hold on to power.

Yet times are changing and the future is now. Welfare services are groaning under the weight of rapidly ageing populations. The digital age with its disruptive technologies has suddenly arrived, too prematurely for the many countries that have not yet ensured an adequate supply of technical skills. Emerging-country economies are moving quickly up the value scale and eating into developed-country markets with highly competitive goods and services. The rise of China is posing new tests for global governance systems accustomed to one hegemon, not two. Obviously, the future for the US and Europe is about relative decline. Europe’s responses to the challenges of rapid change will determine how deep and how fast it will lose position.

Long gone are the days when dominance was Europe’s global mission and complacency was the state of mind in national capitals. Now the future is viewed as a dangerous place, its outlines blurred by bewilderingly rapid change, provoking anxieties and insecurities among populations badly bruised by a brutal recession. Seeking guidance if not certainties, it is little wonder that governments are ready to spend money on studies of global political and economic trends.

Too often, however, their conclusions are selectively adopted, warnings ignored and actions for long-term benefit indefinitely delayed before governments find the political courage to act. Stuttering attempts to raise retirement ages and lower public pension costs in Europe are just one example.

As John Maynard Keynes wrote in 1937: “the idea of the future being different from the past is so repugnant to our conventional modes of thought that we, most of us, offer a great resistance to acting on it in practice.”

Many studies of global trends are strikingly gloomy. Their language is peppered with references to “danger”, “uncertainty”, “change” and “conflict”. Looking at the years up to 2040, a study by the UK’s Ministry of Defence suggests unappetisingly that “during this timeframe the world is likely to face the reality of a changing climate, rapid population growth, resources scarcity, resurgence in ideology and shifts in global power from West to East”. Change one variable, however, and important aspects of the future can look different. A study of global economic trends by the Centre for European Policy Studies (CEPS) in Brussels entertains the possibility that global population might peak in 2030 and then start to decline. The implications for Europe are that “the availability of natural resources, energy in particular should not be a major concern”.

The CEPS report is one of three that will form the basis of a comprehensive analysis of global trends to be published later this year by ESPAS (European Strategy and Policy Analysis System). Operating discreetly, ESPAS is an interinstitutional device (European Commission, Council of Ministers, European Parliament and European External Action Service) whose work is designed to give a clearer framework to EU policymaking. Its preliminary report, published in 2012, concluded that the world up to 2030 is being shaped by three global trends – empowerment of individuals, growing inequalities, climate change and scarcity, and what it calls a “governance gap” where governments fail to meet the desires and aspirations of their people.

A particularly worrying feature of the ESPAS report – and others – is pessimism about finding vital collective responses to challenges such as climate change and population growth. The UK Ministry of Defence document says there will be “constant tension between greater interdependence between states, groups and individuals and intensifying competition between them”. In a similar vein, CEPS argues that centrifugal forces in areas such as financial markets, trade and sovereign debt are working “in the direction of reducing the rationale for EU integration”. Instead, they favour member-state decisions “driven by national considerations only.”

This chilling warning comes in a year when many voters will seem to turn away from collective solutions in favour of loosening the ties between EU member states. If Euro-hostiles do live up to some forecasts and win 25% of seats in the European Parliament, they will be delivering unambiguous protests against the power of Brussels to tell member states what to do. Perhaps the most significant battle between the forces of integration and disintegration will be in the Netherlands. Last week, Geert Wilders, the charismatic leader of the Party for Freedom, unveiled a report from a British consultancy making the economic case for Dutch withdrawal from the Union – “Nexit.” If the Party for Freedom comes out of the European Parliament elections as the largest party, the Dutch debate on Europe will begin to resemble the British: EU reform versus exit.

However the 2030 scenario unfolds, the EU’s economic prospects are so poor as to threaten the maintenance of crucial policies, from social welfare to R&D and education and training. The average annual growth rate for the EU27 was 2.6% in the decade before the crisis. CEPS expects no more than 1.5% until 2030.

The Union’s new leadership taking office later in the year may wish to plan for faster growth, but it will need a strategy for coping with shrinking resources and declining power and influence in the world. Europe still has the talents and capacities to thrive against more powerful competition. What it must hold on to is self-belief.